Guide for First Time Mobile Contract Signers

My First Mobile Contract Guide

If you've never signed a mobile contract before, then you might be wondering what you've got yourself into. With so many operators and contracts on the market, choosing between them can be complicated and sometimes overwhelming. Today we're looking at some of the most frequently asked questions by first time mobile contract signers. So if you need answers, read on and find out all you need to know about your first mobile contract.

Should I Go with O2 Mobile or T-Mobile, Does it Matter?

There are lots of mobile operators to choose from, and to some extent it doesn't really matter who you choose. A phone call made from an O2 Mobile number is going to cost more or less the same as one made from a T-Mobile number, ans the same thing is true of text messages. The cost of mobile data does vary a little by operator, though not too much. However, what does matter is the size of the contract that you sign and the calling plan it contains. And you'll find that some operators just offer calling plans that fit your needs better than others. Also, there are some operators that are better for certain groups of people. Business users tend to go with O2 Mobile, since they have better business contracts, whilst heavy users tend to go with T-Mobile who usually have the largest contacts available. But in a nutshell, it's the calling plan that's more important than the operator.

What is a Calling Plan?

When you sign a mobile contract you'll be asked to choose a calling plan. This is a set of limits for the amount of mobile data, calling minutes and text messages that you can use each month for your fixed monthly price. Choosing the right calling plan is incredibly important, because the wrong plan is going to cost you money. Take, for example, a calling plan that has thirty calling minutes included per month. You will pay the same monthly fee regardless of whether you use thirty minutes or three minutes. A plan that's too large for you will mean that you're paying for services that you don't even use. But what happens if you call for forty minutes when your contract only includes thirty? You'll be charged your regular monthly payment plus premium prices on the ten extra minutes that you used. So a plan that's too small for you will mean that you get lots of expensive extra payments for breaking your monthly limits. Choose a calling plan carefully, maybe even get a pay as you go plan for a month or so and track your phone use, so that you know you're getting a plan that reflects your needs.

What's the Difference between Incentive and SIM Only?

Most mobile operators offer two kinds of contracts, incentive and SIM only. Both of these contracts will give you a calling plan. However, an incentive contract also gives you a mobile phone, usually for free, but some high end phones will require a small payment. The monthly cost on an incentive contract will be higher than that of a SIM only deal, even when both contracts have the same calling plan. This is how the operator covers the cost of your phone. One thing that you should realise is that over the course of this agreement you usually end up paying a little more than the average market cost of the phone that you receive. This is because you're paying for the convenience of not spending all your cash at one time, and because the company is taking a credit risk on you by giving you a mobile without full payment. Some people prefer to simply buy their own phone and sign a SIM only contract, since this works out to be cheaper in the long term. However, if you need a phone and can't afford the cash to pay full price immediately, then an incentive contract will give you a brand new phone and let you pay for it in instalments.

How Long Will My Contract be For?

Contract lengths vary by operator, and you'll usually have at least two choices. The usual lengths are twelve months, eighteen months and twenty four months. Sometimes SIM only deals come in thirty day rolling versions. This means that it will automatically renew every thirty days until you tell your operator to stop service. In general, the longer your contract is the cheaper your monthly payments will be. This is especially true if you sign an incentive contract, because the total cost of the phone will be spread out over a greater number of payments, making each individual payment lower. But you'll also need to consider not just finances, but how long you can commit to. A longer contract will mean that you have to wait longer to switch to another operator and get a better deal, it will mean paying the same monthly price even if your financial situation changes, and it might even mean that you can't change your calling plan.

Can I Cancel My Mobile Contract?

You can cancel a mobile contract if you want to, but you might not want to when you find out how expensive it is. Mobile contracts contain a non-completion clause that allows the company to penalise you for not finishing the contract in order to compensate themselves for the lost business. The penalty is usually a fixed sum (which varies by operator) multiplied by the number of months that are remaining in the contract when you stop service. The fixed sum is relatively high, and these cancellation costs add up quickly, particularly if there are more than a couple of months left in your contract. On top of that, if you signed an incentive contract you will also be liable for the remaining amount owing on your phone. The operator will not accept the phone back in lieu of payment. It's generally best not to cancel mobile contracts unless you really have to, since the costs are quite prohibitive.